Analyst Conference Summary

Onyx Pharmaceutical

conference date: February 19, 2008 @ 7:00 AM Pacific Time
for quarter ending: December 31, 2007 (4th quarter 2007)

Forward-looking statements

Overview: Results overshadowed by recent announcement of negative lung cancer trial results for Nexavar.

Basic data:

No revenues - deal with Bayer puts Nexavar revenues in operating expenses (see below).

Net loss was $11.7 million.

EPS (earnings per share) were negative $0.21.


No 2008 revenue guidance at this time. Annualized shared expenses to be similar to Q4 2007, but increase in SG&A expense on our end. May be cash flow profitable for 2008.

Conference Highlights:

We are disappointed by the EXCAPE non-small cell lung cancer results. However, this one trial does not change our view that Nexavar well be beneficial in multiple types of cancer.

Nexavar global sales through Bayer were $124.9 million, about doubling the year-earlier amount and up 19% sequentially from Q3 2007. $43 million was generated in U.S., with growth driven by uptake in liver cancer. Liver cancer is 3rd leading cancer killer globally.

Reminded that Nexavar is approved by the FDA to treat liver cancer and advanced kidney cancer.

Employee based compensation expense included in the net loss was $3.9 million or $0.07 per share.

The net expense line for the joint Nexavar business with Bayer, which includes shared expenses offset by revenues, showed that the net amount due to Onyx from Bayer for the quarter was $4.4 million. Research and marketing shared expense increased to support trials and introductions to new national markets.

Onyx research and development expense was $5.5 million. Selling, general and administrative expense was $16.4 million.

Net operating expense was $17.5 million. Interest income was $5.8 million.

Cash and equivalents ended at $469.7 million.

Liver cancer approval in EU in Q4 2007 is being followed up by country by country adoption. Other nations around globe are being added, notably China.

Kidney cancer market is increasingly competitive, especially in U.S. Continuing trials to expand use of Nexavar in this market.

Around 200 clinical studies underway with Nexavar, with about 2 dozen key trials in varying tumor types, including lung cancer and breast cancer.


What led to outcome? Increase in mortality not associated with bleeding sometimes seen with similar drugs. Other than that, still analyzing the data.

Operating expense over time? We do want to launch with our first mover advantage. Then we want to extend to earlier stages of liver cancer, so need to invest in more trials. We are moving into more randomized Phase II trials for other cancer types. How much we spend in the long run will depend on intermediate results.

Timing of Japan launch in renal cancer? RCC pricing and revenues to come in throughout this year. LCC in about 12 months.

Squamous v. non-squamous populations in failed study? Will have to wait for the presentation at a science confererence.

Nexavar seems to fail except in monotherapy. Why waste money on combination therapy trials? We don't agree. We think some combinations for some indications have shown some encouraging results.

Phase II breast cancer trials? They are large trials for Phase II. Two have taxane backbones in them (like the lung cancer trial that failed). Five trials, and just getting underway so expenses will continue through 2009. Working with independent experts on these trials.

Reason for modest sequential U.S. revenues? Q4 was before U.S. sales force could get Nexavar for liver cancer going fully.

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Copyright 2008 William P. Meyers